First Ever 'Credit Guarantee Scheme' Unveiled to Boost Livestock Sector & Empower MSMEs

The Indian government's Department of Animal Husbandry & Dairying, under the Ministry of Fisheries, Animal Husbandry, and Dairying, has rolled out an impactful Credit Guarantee Scheme to invigorate the livestock sector and bolster credit accessibility for Micro, Small & Medium Enterprises (MSMEs). The scheme, operating under the Animal Husbandry Infrastructure Development Fund (AHIDF), seeks to strengthen the credit delivery system and facilitate collateral-free credit for entrepreneurs engaged in the livestock industry.

To materialize this ambitious endeavor, the Department has established a Credit Guarantee Fund Trust amounting to Rs. 750.00 crores. Through this trust, MSMEs operating in the livestock sector can avail credit guarantee coverage of up to 25% of the credit facilities extended by eligible lending institutions. This move will enable a smoother credit flow to un-served and under-served sections of the livestock sector, especially supporting first-generation entrepreneurs and underprivileged individuals who face challenges in providing collateral security for their ventures.

The main goal of the Credit Guarantee Scheme is to prioritize project viability and secure credit facilities based on the primary security of the assets financed. By mitigating the risks associated with collateral-free lending, the initiative encourages investments in the livestock sector, paving the way for sustainable growth and development.

Also Read: CM Yogi to Implement 'Mukhya Mantri Khet Suraksha Yojana' Statewide, to Allocate Rs 350 Crore

The Credit Guarantee Scheme is a part of the Prime Minister's AtmaNirbhar Bharat Abhiyan stimulus package, specifically allocated for the "Animal Husbandry Infrastructure Development Fund" (AHIDF). The AHIDF aims to incentivize investments in critical segments of the livestock industry, including dairy processing and value addition infrastructure, meat processing and value addition infrastructure, animal feed plants, breed improvement technology and breed multiplication farms, animal waste to wealth management (agri-waste management), and setting up veterinary vaccine and drugs manufacturing facilities.

A significant highlight of the AHIDF scheme is the establishment of the Credit Guarantee Fund Trust with a corpus of Rs. 750.00 Crores. The Department has partnered with NAB Sanrakshan Trustee Company Private Limited, a wholly-owned subsidiary of NABARD, to administer the fund trust. This marks the country's first-ever fund trust under the Credit Guarantee Scheme in the agriculture and animal husbandry sector. The initiative is a pioneering step that is expected to significantly increase the number of MSME units benefiting from the AHIDF scheme, ultimately bolstering the livestock sector and supporting the collateral-free credit offered by banks.

To ensure seamless implementation, a user-friendly Credit Guarantee Portal has been developed as a rule-based B2B platform. The portal streamlines the enrollment of eligible lending institutions under the Credit Guarantee Scheme, facilitates the issuance and renewal of Credit Guarantee Cover, and efficiently handles the settlement of claims.

The credit guarantee scheme is anticipated to foster increased participation of MSMEs in the livestock sector, leading to a surge in credit flow and, consequently, strengthening the overall rural economy. By empowering MSMEs and supporting their ventures, the scheme plays a pivotal role in promoting sustainable economic growth and the advancement of the livestock sector's potential.

Also Read: PMKSNY: PM Narendra Modi to Address Public Gathering in Sikar, to Transfer Kisan Samman Nidhi Payments